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FEE lists below some areas where it does not agree with EFRAG’s preliminary views as expressed in the consultation paper:
a. Role of stewardship in the ED. Even though FEE acknowledges the concerns that stewardship has not been given adequate prominence in the ED, FEE does not agree that stewardship should be included as a separate objective of financial reporting for the same reasons as explained in the Basis for Conclusions (BC1.10) of the ED1.
b. Prudence.FEE recognises that asymmetric prudence might be appropriate in certain circumstances but does not invite the IASB to introduce the concept within the Conceptual Framework. FEE is rather inviting the IASB to consider the notion of prudence more broadly, not just for measurement but also for recognition purposes. FEE also suggests recognising prudence separately from neutrality.
c. Substance over form. FEE welcomes the introduction of substance over form as part of the faithful representation as included in the ED. Even though FEE acknowledges that legal form can affect directly the economic substance of the transactions, FEE does not believe that a direct reference to legal form is necessary in the Conceptual Framework.
d. Definition of income and expenses. FEE agrees with the IASB’s proposals in the ED regarding the definitions of income and expenses.
e. Executory contracts.In FEEs letter to the IASB FEE welcomes the guidance on executory contracts, however FEE asks to further articulate the notion of unit of account and how the IASB intends to use this notion in the guidance for executory contracts in the Revised Conceptual Framework.
f. Reporting items of income and expenses in the other comprehensive income. In FEE´s comments to the IASB FEE agrees with the notion that the profit or loss should be the primary source of information about an entity’s financial performance for the period.
g. FEE does not agree with EFRAG’s preliminary views on long-term investors.